In the new issue of Regulation, economist Pierre Lemieux argues that the recent oil price decline is at least partly the result of increased supply from the extraction of shale oil. The increased supply allows the economy to produce more goods, which benefits some people, if not all of them. Thus, contrary to some commentary in the press, cheaper oil prices cannot harm the economy as a whole.

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You Go to War with the State Department You Have

There’s been a good bit of commentary over the last few weeks about the role of the State Department in post-“Mission Accomplished” Iraq.

First, WaPo reporter Rajiv Chandrasekaran pulled the curtain back from America’s “provincial reconstruction teams” in Iraq, noting that in one instance

The USDA had trouble finding six people who wanted to work in Iraq among its more than 100,000 employees. Although a USDA official said the department encouraged its workers to apply, officials at State believe USDA did not move with alacrity because the two agencies had not agreed on a mechanism to reimburse the USDA for the services it would provide in Iraq. Eventually, USDA and State agreed that USDA would provide just two of the six. The other four would be private contractors hired by State.

The first USDA specialist, Randy Frescoln, a rural credit specialist from Iowa, landed in Iraq in December and was sent to the reconstruction team in Tikrit. Although he was supposed to stay in Iraq for a year, he said he plans to leave next month because he received a promotion while he was away. The second specialist has not yet arrived.

Even if USDA and State were to get an agriculture expert to Diyala now, [a State Department administrator] believes, it is too late. Security conditions have deteriorated so significantly in the province that reconstruction personnel are lucky to make one or two trips a week off the military base where they live and work.

Secretary of State Rice was left only to lament that the State Department simply doesn’t employ the types of people who the administration wants to rebuild Iraq: “These are people like agronomists, veterinarians, city planners and others. No diplomatic service in the world has these specialties.” That’s true enough. As a result, it’s been left to DOD to staff open State Department spots in Iraq. (No word on whether DOD employs veterinarians and city planners.)

We’ve seen the announcement that State intends to double the number of “Provincial Reconstruction Teams” in Iraq, from the total staffing today of 10 30-person teams to 20 teams. Also, Sen. Richard Lugar has resurrected the idea of the “Office of Reconstruction and Stabilization” in the State Department, which some of its strongest advocates liken to a “colonial office.”

“I defy anyone to tell me how you can use that many people. It is nuts … it’s insane and it’s counterproductive … and it won’t work. I’ve been around the State Department long enough to know you can’t run an outfit like that.”

Then, a “senior State Department official” chimes in with a broader complaint:

“Maintaining an oversized mega-embassy in Baghdad is draining personnel and resources away from every other U.S. embassy around the world, and all for what?”

To try to salvage the Bush doctrine, that’s for what.

But really, there’s an even broader question here: Do we want a national security bureaucracy that’s capable of taking on the types of tasks that we’re trying to do in Iraq? If so, we probably need a complete overhaul of the entire bureaucracy itself. That doesn’t mean just the State Department, or just DOD — it means everything.

There’s going to be inevitable bleedover between on-the-ground reconstructors, political advisers, police, military, intelligence operatives, and on and on. These people, by and large, are not currently employed by agencies that can force them to deploy into the middle of a conflict. You’d have to develop an agency that has these people on staff and could force them to deploy in order to come even close to the capacity that you’d need to have a good shot at success in these types of endeavors.

Simply put, our current bureaucracy is not designed — at all — with these sorts of operations in mind. If we came to the consensus that we need to do a lot more Iraq-style missions in the future, it’s time to completely reformulate not just our strategy, but the structure of the agencies that are devoted to executing the strategy.

Realistically, putting this into practice would probably mean at least tripling, if not quadrupling, the State Department’s budget, and maybe doubling the DOD budget, putting the combined budget well over a trillion dollars a year — about 10 percent of GDP. And that’s without anything near a guarantee of success. Sounds like a colossal waste to me.